UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): March 8, 2005
FREQUENCY ELECTRONICS, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-8061 11-1986657
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
55 Charles Lindbergh Blvd., Mitchel Field, NY 11553
(Address of principal executive offices) (Zip Code)
(516) 794-4500
(Registrant's telephone number, including area code)
NONE
(Former name, former address and former fiscal year,
if changed since last report)
________________________________________________________________________________
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Page 1 of 6 pages
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On March 8, 2005, Frequency Electronics, Inc. issued a press release, which
sets forth its results of operations for the quarter ended January 31, 2005. A
copy of the press release is attached hereto as Exhibit 99.1 and is incorporated
herein by reference. Such information shall not be deemed "filed" for purposes
of Section 18 of the Securities Exchange Act of 1934, as amended, and is not
incorporated by reference into any filing of the company, whether made before or
after the date hereof, regardless of any general incorporation language in such
filing.
ITEM 9.01 (c). EXHIBITS.
99.1 Press Release of Frequency Electronics, Inc., dated March 8, 2005.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FREQUENCY ELECTRONICS, INC.
By: /s/ Alan Miller
---------------
Alan Miller
Chief Financial Officer
and Treasurer
Dated: March 9, 2005
Exhibit 99.1
PRESS RELEASE
Frequency Electronics Announces Results for 3rd Quarter Fiscal Year 2005
Mitchel Field, NY, March 8, 2005 - Frequency Electronics, Inc. (AMEX-FEI) today
announced that revenues for the third quarter of fiscal year 2005, which ended
31 January 2005, were $11.2 million compared to $14.1 million for the same
period of fiscal 2004. For the nine month period ended 31 January 2005, revenues
were $43.3 million compared to $32.8 million in the first nine months of the
previous fiscal year.
In the third quarter, the Company recorded a net loss of $368,000 ($0.04 per
diluted share), compared to net income of $364,000, or $0.04 per diluted share,
in the same quarter of fiscal 2004. For the nine month period ended 31 January
2005, net income was $1.5 million, or $0.17 per diluted share, compared to a net
loss of $576,000 ($0.07 per diluted share) in the first nine months of the
previous fiscal year. Results include prior period restatement of earnings per
share and net income to reflect the Company's equity income from its investment
in Morion, Inc.
General Joseph Franklin, Chairman of the Board, said: "The widely-reported
slowdown in OEM wireless infrastructure purchasing that began in the last half
of calendar year 2004 has been the primary influence on revenues in the last two
quarters. Operating results in the past quarter were further impacted by
increased development spending. Comparing this full fiscal year, which ends
April 30th, with fiscal 2004, we continue to expect increased revenues and
profitability. We will achieve this with no material contribution from our major
new product developments. Looking ahead to next fiscal year, our investment in
these new products will begin to contribute to the Company's ongoing growth."
Revenues for the Commercial Communications segment were $5.3 million for this
past quarter and $25.4 million for the nine months of fiscal 2005. Revenues for
the nine months of fiscal 2004 were $18.5 million. Included in the nine months
of fiscal year 2005 revenues are commercial satellite sales, which rose to $4.3
million, compared to $1.4 million in the first nine months of fiscal 2004
Third quarter revenues for the US Government segment were $985,000 and $4.3
million for the nine months of fiscal 2005. Revenues for the nine months of
fiscal 2004 were $5.3 million. Additional US government sales are included in
the FEI-Zyfer segment.
FEI-Zyfer's revenues for the third quarter were $2.5 million and $6.6 million
for the nine months of fiscal 2005, up from $4.0 million the first nine months
of fiscal 2004. The large majority of FEI-Zyfer's revenues are derived from US
government programs.
Gillam-FEI recorded revenues of $2.6 million for the third quarter and $7.6
million for the nine months of fiscal 2005. Revenues for the nine months of
fiscal 2004 were $5.2 million.
Research and development expenses during the third quarter were $2.0 million, up
from $1.2 million and $1.6 million in the first and second quarters,
respectively. During the quarter, investment in new developments included:
o Precision Reference Standards (PRS) for wireline networks, a joint
effort between FEI Communications, Gillam-FEI, and FEI-Zyfer.
o High-temperature clock technology for energy exploration.
o Additional applications for the FE-405 high precision oscillator series.
Chief Financial Officer, Alan Miller, added the following comments: "Operating
margins during the quarter were impacted by lower revenues and the increased
rate of R&D spending. Gross margins during the third quarter were 32.9%,
compared to 34.4% for the preceding six months. R&D expenditures were 18% of
revenues compared to 9% for the first six months. We anticipate R&D spending in
the fourth quarter will return to levels comparable to the first half of the
year."
About Frequency Electronics
Frequency Electronics, Inc. is a world leader in the design, development and
manufacture of high-technology frequency, timing and synchronization products
for voice, video and data telecommunications delivered by satellite or
terrestrial means for both commercial and DOD customers. The Company's
technologies provide unique solutions that are essential building blocks for the
next generation of broadband wireless and fiber optic communications systems,
for critical defense applications and for the ongoing expansion of existing
wireless and wireline networks. Additional information is available on FEI's
website: www.frequencyelectronics.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995:
The Statements in this press release regarding the future constitute
"forward-looking" statements pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
inherently involve risks and uncertainties that could cause actual results to
differ materially from the forward-looking statements. Factors that would cause
or contribute to such differences include, but are not limited to, inability to
integrate operations and personnel, actions by significant customers or
competitors, general domestic and international economic conditions, consumer
spending trends, reliance on key customers, continued acceptance of the
Company's products in the marketplace, competitive factors, new products and
technological changes, product prices and raw material costs, dependence upon
third-party vendors, competitive developments, changes in manufacturing and
transportation costs, the availability of capital, and other risks detailed in
the Company's periodic report filings with the Securities and Exchange
Commission. By making these forward-looking statements, the Company undertakes
no obligation to update these statements for revisions or changes after the date
of this release.
Contact information: General Joseph P. Franklin, telephone : (516) 794-4500
WEBSITE: www.frequencyelectronics.com
Frequency Electronics, Inc. and Subsidiaries
Consolidated Condensed Summary of Operations
Quarter Ended Nine Months Ended
January 31, January 31,
2005 2004(a) 2005(a) 2004(a)
(unaudited) (unaudited)
(in thousands except per share data)
Net Sales $11,222 $14,052 $43,266 $32,831
Cost of Sales 7,529 9,279 28,537 22,171
------- ------- ------- -------
Gross Margin 3,693 4,773 14,729 10,660
Selling and Administrative 2,567 2,945 8,759 8,134
Restructuring Charge - 305 - 431
Research and Development 2,025 1,394 4,850 4,309
------- ------- ------- -------
Operating (Loss) Profit (899) 129 1,120 (2,214)
Interest and Other, Net (a) 361 388 1,225 1,606
------- ------- ------- -------
(Loss) Income before Taxes &
Minority Interest (538) 517 2,345 (608)
Minority Interest - (25) (1) (132)
------- ------- ------- -------
(Loss) Income before Income Taxes (538) 542 2,346 (476)
Income Tax (Benefit) Provision (170) 178 830 100
------- ------- ------- -------
Net (Loss) Income $ (368) $ 364 $ 1,516 $ (576)
======= ======= ======= =======
Net (Loss) Income per Share:
Basic $ (0.04) $ 0.04 $ 0.18 $ (0.07)
======= ====== ====== =======
Diluted $ (0.04) $ 0.04 $ 0.17 $ (0.07)
======= ====== ====== =======
Average Shares Outstanding
Basic 8,499,274 8,379,375 8,473,679 8,364,837
========= ========= ========= =========
Diluted 8,499,274 8,589,893 8,682,099 8,364,837
========= ========= ========= =========
(a) Prior period amounts have been restated to reflect the Company's equity
income from its investment in Morion, Inc.
Frequency Electronics, Inc. and Subsidiaries
Consolidated Condensed Balance Sheets
January 31, April 30,
2005 2004(a)
(in thousands)
ASSETS
Cash & Marketable Securities $ 34,400 $ 31,389
Accounts Receivable 12,862 15,036
Inventories 23,116 21,925
Other Current Assets 3,110 4,485
Property, Plant & Equipment 11,158 11,486
Other Assets 9,722 8,546
-------- --------
$ 94,368 $ 92,867
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities $ 9,091 $ 11,827
Long-term Obligations and Other 17,237 17,657
Stockholder' Equity 68,040 63,383
-------- --------
$ 94,368 $ 92,867
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